Egypt’s El-Sewedy family, known for their prominent status among the country’s billionaire elite, has encountered a significant setback in the value of their stake in Elsewedy Electric, a leading player in the electrical equipment manufacturing sector.
This downturn, amounting to a staggering $677-million decline in market value since March 6, is attributed to the recent devaluation of the Egyptian pound, spurred by the Central Bank of Egypt’s (CBE) adoption of a more market-oriented exchange rate system.
El-Sewedy family loses $677 million as Egyptian currency devalues
Founded in 1938 by the El-Sewedy family, Elsewedy Electric has been instrumental in shaping the electrical industry landscape, contributing substantially to projects across the Middle East and North Africa.
Presently, Ahmed El-Sewedy and his siblings, Sadek and Mohammed, maintain a controlling stake of 68.1 percent in the company, representing 1,478,358,330 ordinary shares. This stake has cemented their position among the country’s richest individuals.
The CBE’s decision to transition toward a market-determined exchange rate aims to tackle Egypt’s pressing foreign currency shortage. Additionally, the bank raised interest rates by 600 basis points to 27.25 percent in a bid to address this economic challenge.
This devaluation, coupled with the decline in El-Sewedy Electric’s share price on the Egyptian Exchange, has led to a significant decrease in the value of the El-Sewedy family’s stake. Their holdings have plummeted by $677 million, from $1.96 billion to $1.28 billion.
Egyptian currency woes dent El-Sewedy family fortune, exposing economic challenges
Despite this financial setback of $677 million, the El-Sewedy family maintains their position as one of Egypt’s leading billionaire families and continues to be among the richest investors on the local bourse.
At the time of drafting this report, the pound is trading at a record low of 47.8 against the U.S. dollar, marking a year-to-date depreciation of 35.36 percent, according to data sourced from Xe.com.
The El-Sewedy family’s experience underscores the impact of currency fluctuations on the fortunes of even the most affluent individuals. It highlights the challenges facing Egypt’s economy amidst ongoing market volatility.